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Is It Illegal to Not Have Health Insurance 2020?

The Individual mandate law, which requires you to have health insurance, does not apply anymore in 2019 at the federal level; nevertheless, there are a few states with an individual mandate at the state level.

If you live in the following states, you may have to pay a health insurance penalty in 2020 for not having health insurance:

• Massachusetts
• New Jersey
• Vermont
• California
• Rhode Island
• DC

Individual Mandate

In the past, if you went without the Affordable Care Act (ACA) compliant health insurance, you would have to pay a significant tax fine.

According to Kaiser Health News, the penalty for not having proof of health insurance tax form in 2018 was $695 per uninsured adult or 2.5% of your revenue, whichever amount was higher.

Now that the individual mandate has been eliminated, there is no tax penalty at the federal level. Nonetheless, some states have put their mandate laws in place at the state level to encourage people to buy health insurance.

Individual Mandate in New Jersey

After the individual federal mandate was set to be annulled, New Jersey decided to put one in place with a tax penalty at the state level that took effect in 2019.

If you don’t have health insurance or do not qualify for an exemption, you may have to pay the tax penalty for each month without the minimum essential coverage.

The tax penalty generally depends on your domestic income (which comprises the pay of any dependents) and family size. Nonetheless, the penalty capped at the cost of the average statewide premium for bronze health insurance plans.

According to nj.gov, the minimum tax penalty for a person is $695, and the maximum is $3,012 for 2019. For a family of 5 with a family income of $200,000 or below, the minimum tax fine is $2,085, and the maximum is $9,500.

If you are not obligated to file a tax return for 2019 in NJ, you will be exempt from paying this tax fine.

Individual Mandate in California

California has also just implemented an individual mandate law and imposes the shared responsibility tax penalty for people.

According to Covered California, the reasoning for restoring the individual mandate is a factor in keeping premiums, on average, 3.2% lower in the forthcoming year. Covered California anticipates that this could leave residents saving an average of $167 per year on their health insurance premiums in 2020.

Those who opt not to buy health insurance but can afford it may be subjected to a tax penalty, which will be a part of their yearly state tax filing. The penalty for Californians who go without health insurance can be 2.5% of domestic income or $696 per adult whichever is larger.

Individual Mandate in Vermont

Vermont legislators passed an individual mandate law that came into effect in 2020, though they did not develop a penalty for those who go without health insurance.

This does not mean there will not be a penalty. If you live in Vermont, keep an eye out if lawmakers decide to develop and implement a penalty for those going without minimum essential coverage in the coming days.

Rhode Island’s Individual Mandate

Starting in 2020, Rhode Island residents are also subject to an individual mandate tax fine if they go without coverage. Unless RI people qualify for an exemption, they will have to pay a tax for going uninsured when they file their taxes in the preceding year.

The penalty for going uninsured in Rhode Island is similar as it would have been under the federal penalty. It will cost a family $695 for every uninsured adult and $347.50 for every uninsured child or 2.5% of the household income, whichever is greater. The maximum a household can be fined $2,085 per family or – for the percentage of revenue calculation – the average cost of a bronze plan in Rhode Island.

How to Avoid the Individual Mandate Tax?

To evade this tax, you can enroll in a health insurance plan during the open enrollment period. For 2021 coverage, the national open enrollment period will take place from November 1st, 2020, through December 15th, 2020.

In case you lose your health insurance in the middle of the year, you may qualify for a special enrollment period. Depending on the state you live in, you may be able to enroll in short-term health insurance to fill any coverage gaps you may experience throughout the year.

Resources and References:

• New Jersey Shared Responsibility Requirement
• Vermont’s Individual Mandate and Exemptions